Tags: Corporate | Bonds | Low | Rates

Corporate Bonds Booming as Firms Embrace Low Rates

Wednesday, 04 Aug 2010 01:46 PM

Corporate bonds are booming, fueled by companies rushing to sell their debt and take advantage of some of the lowest borrowing costs in history.

U.S. corporate bond sales soared 31 percent in July, making it the busiest month on record for sales by U.S. companies with junk-credit ratings, Bloomberg Businessweek reports.

Both large and small companies are using the low rates to boost balance sheets and lower their interest costs by millions of dollars for years to come.

"I think we are accessing the market at precisely the right time, and a very opportune time," Stephen De May, treasurer of Duke Energy Indiana, told The Wall Street Journal.

In early July, a Duke subsidiary borrowed $500 million at 3.75 percent, the fourth-lowest rate on record for a large U.S. corporate borrower, according to Bank of America Merrill Lynch.

According to data provider Dealogic, corporate bond sales around the world have reached about $1.4 trillion thus far this year.

McDonald's just raised $450 million in 10-year debt at 3.5 percent, a record-low yield for a large batch of debt issued by a U.S. corporate borrower. J.P. Morgan Chase just issued $2.5 billion in 10-year debt at 4.4 percent.

Financial firms have about 48 percent of total debt issuance globally, paying rates that are higher rates than McDonald’s but still historically cheap.

Asia's debt market is also on track for a record year, and European corporations are busily raising money as well.

© 2017 Newsmax Finance. All rights reserved.

 
1Like our page
2Share
StreetTalk
Corporate bonds are booming, fueled by companies rushing to sell their debt and take advantage of some of the lowest borrowing costs in history. U.S. corporate bond sales soared 31 percent in July, making it the busiest month on record for sales by U.S. companies with...
Corporate,Bonds,Low,Rates
240
2010-46-04
Wednesday, 04 Aug 2010 01:46 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved